Australian investors are showing an increasing preference for offshore investments, with global equities seeing a large uptick in interest and fixed income also attracting attention.
The latest Certitude Global Investing Intentions Index (CGIII), which tracks net demands for global investments, rose to 175 points in August, representing a 3.5 per cent increase from last month (169) and an 11.4 per cent rolling increase over the past quarter.
Investors also revealed an eagerness to up global asset holdings sooner, with 36 per cent of investors in the August study stating they intend to make their next overseas investment within the next three months – up from 33 per cent in the previous monthly study.
Three quarters (74 per cent) of investors expected markets to rise over the coming quarter and just 15 per cent expected a drop, with the number believing they needed to increase their global exposure steady at 43 per cent.
“This research has shown that not only are investors more interested in global investments but they are also becoming more serious about actually allocating assets overseas,” Certitude Global Investments chief executive Craig Mowll said.
“The research confirms that Australian investors, who have long held a very strong domestic bias, recognise the opportunities for growth, income and diversification that come from investing globally.”
Fixed income has begun to see an uptick in popularity, with 7 per cent of investors saying fixed income is a global asset class they are planning on using, up from 4 per cent in the previous month’s survey.
“Though this remains a relatively small proportion of investors’ interest, when looking at global investment opportunities, the research shows significant increases in certain fixed income categories over the past quarter,” Mr Mowll said.
Emerging market debt and sovereign debt have both more than doubled in popularity since May, the study found.
“No investors preferred sovereign debt in May and this is now the choice of 20 per cent of investors who plan to use fixed income,” Mr Mowll said.
“Similarly, emerging market debt has gone from 9 per cent in July to 24 per cent in August, which is especially interesting considering that as an overall region, the research shows a decline in interest in emerging markets as a whole.”
Europe and China gained interest as investment destinations, catching up to the US as preferred market destinations.
Just over half of investors interested in gaining overseas exposure said they would like to invest in these regions in the 12 months from August.
Western Europe was a choice for 17 per cent of investors looking to invest globally, representing a 5 percentage point increase from July. China’s appeal was up 3 percentage points since July, with 15 per cent of investors interested in using China for their upcoming global investments, the survey found.
“This quarter’s findings show consistent growth in the appeal of global investments for Australian investors, as these investors become even more attuned to the opportunities available offshore,” Mr Mowll concluded.
The online study was based on almost 1,000 responses from Australians with investable assets outside of their home and superannuation.
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